Republic of the Philippines In the case of Isabelo Doce vs. Workmen's Compensation Commission, et al. (G.R. No.
39;s Compensation Commission, et al. (G.R. No. L-9417, December 22,
SUPREME COURT
Manila
EN BANC
G.R. No. L-21212 September 23, 1966
CITIZENS' LEAGUE OF FREEWORKERS AND/OR BALBINO EPIS, NICOLAS ROJO, ET AL., petitioners,
vs.
HON. MACAPANTON ABBAS, Judge of the Court of First Instance of Davao and TEOFILO GERONIMO
and EMERITA MENDEZ, respondents.
Carlos Dominguez, Jr. for petitioners.
C. S. Nitorreda for respondents.
DIZON, J.:
Petition for certiorari with a prayer for the issuance of a writ of preliminary injunction filed by the Citizens'
League of Freeworkers, a legitimate labor organization, — hereinafter referred to as the Union — and its
members against the spouses Teofilo Geronimo and Emerita Mendez, and the Hon. Macapanton Abbas, as
judge of the Court of First Instance of Davao. Its purpose is to set aside the writ of preliminary injunction
issued by the latter in Civil Case No. 3966 and restrain him from proceeding with the case, on the ground
that the controversy involves a labor dispute and is, therefore, within the exclusive jurisdiction of the Court
of Industrial Relations.
It appears that on March 11, 1963, respondents-spouses owners and operators of auto-calesas in Davao
City, filed a complaint with the Court of First Instance of Davao (Civil Case No. 3966) to restrain the Union
and its members, who were drivers of the spouses in said business, from interfering with its operation,
from committing certain acts complained of in connection therewith, and to recover damages. The
complaint alleged that the defendants named therein used to lease the auto-calesas of the spouses on a
daily rental basis; that, unable to get the spouses to recognize said defendants as employees instead of
lessees and to bargain with it on that basis, the Union declared a strike on February 20, 1963 and since then
had paralyzed plaintiffs' business operations through threats, intimidation and violence. The complaint also
prayed for the issuance of a writ of preliminary injunction ex-parte restraining defendants therein from
committing said acts of violence and intimidation during the pendency of the case.
On March 11, 1963 the respondent judge granted the writ prayed for, while deferring action on petitioners'
motion to dissolve said writ to March 20 of the same year.
Meanwhile, on March 12, 1963, petitioners filed a complaint for unfair labor practice against the
respondents-spouses with the Court of Industrial Relations on the ground, among others, of the latter's
refusal to bargain with them. 1awphîl.nèt
On March 18, 1963, petitioners filed a motion to declare the writ of preliminary injunction void on the
ground that the same had expired by virtue of Section 9 (d) of Republic Act 875. In his order of March 21,
1963, however, the respondent judge denied said motion on the ground that there was no employer-
employee relationship between respondents-spouses and the individual petitioners herein and that,
consequently, the Rules of Court and not Republic Act No. 875 applied to the matter of injunction.
Thereupon the petition under consideration was filed.
1958), upon a similar if not an altogether identical set of facts, We held:
This case falls squarely within our ruling in National Labor Union v. Dinglasan, 52 O.G., No. 4,
1933, wherein this Court held that a driver of a jeep who operates the same under the boundary
system is considered an employee within the meaning of the law and as such the case comes
under the jurisdiction of the Court of Industrial Relations. In that case, Benedicto Dinglasan was
the owner and operator of TPU jeepneys which were driven by petitioner under verbal contracts
that they will pay P7.50 for 10 hours use under the so called "boundary system." The drivers did
not receive salaries or wages from the owner. Their day's earnings were the excess over the
P7.50 they paid for the use of the jeepneys. In the event that they did not earn more, the owner
did not have to pay them anything. In holding that the employer-employee relationship existed
between the owner of the jeepneys and the drivers even if the latter worked under the boundary
system, this Court said:
"The only features that would make the relationship of lessor and lessee between the
respondent, owner of the jeeps, and the drivers, members of the petitioner union, are
the fact that he does not pay them any fixed wage but their compensation is the excess
of the total amount of fares earned or collected by them over and above the amount of
P7.50 which they agreed to pay to the respondent, and the fact that the gasoline
burned by the jeeps is for the account of the drivers. These two features are not,
however, sufficient to withdraw the relationship, between them from that of
employer-employee, because the estimated earnings for fares must be over and above
the amount they agreed to pay to the respondent for a ten-hour shift or ten-hour a day
operation of the jeeps. Not having any interest in the business because they did not
invest anything in the acquisition of the jeeps and did not participate in the
management thereof, their service as drivers of the jeeps being their only contribution
to the business, the relationship of lessor and lessee cannot be sustained."
Even assuming, arguendo, that the respondent court had jurisdiction to issue the abovementioned writ of
preliminary injunction in Civil Case No. 3966 at the time it was issued, We are of the opinion, and so hold,
that it erred in denying petitioners' motion to set aside said writ upon expiration of the period of thirty
days from its issuance, upon the wrong ground that there was no labor dispute between the parties and
that, therefore, the provisions of Republic Act No. 875 did not apply to the case. As stated heretofore, there
was a labor dispute between the parties from the beginning.
Moreover, upon the filing of the unfair labor practice case on March 12, 1963, the Court of Industrial
Relations acquired complete jurisdiction over the labor dispute and the least that could be done in Civil
Case No. 3966 is either to dismiss it or suspend proceedings therein until the final resolution of the former.
Wherefore, judgment is hereby rendered setting aside the writ of preliminary injunction issued by the
respondent judge in Civil Case No. 3966 of the Court of First Instance of Davao, with costs.
Concepcion, C.J., Reyes, J.B.L., Barrera, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ., concur.
Regala, J., took no part.
DOLE’s BWC issues Q & A on 13th month pay A: The 13th month pay should be paid not later than December 24 of each year.

To enlighten workers and employers alike on the 13th month pay, a core general labor standard, the Q: Is there an option when a covered employer should pay the 13th month?
DOLE’s Bureau of Working Conditions (BWC) yesterday issued a Question and Answer (Q & A) information
material on the 13th month pay, and Labor and Employment Secretary Rosalinda Dimapilis-Baldoz
A: Yes. A covered employer may pay one-half of the 13th month pay before opening of the regular school
promptly tasked the Labor Communications Office (LCO) to disseminate it as widely as possible.
year and the other half on or before the 24th day of December of every year.

Following is the Q & A on the 13th month pay:

Q: Are all employees entitled to 13th month pay?

Q: What is 13th month pay?

A: 13th month pay is a form of monetary benefit equivalent to the monthly basic compensation received by
an employee, computed pro-rata according to the number of months within a year that the employee has
rendered service to the employer.
A: Only rank-and-file employees are entitled to 13th month pay. The Labor Code, as amended,
distinguishes a rank-and-file employee from a managerial employee. A managerial employee is one who is
vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such
managerial actions. All employees not falling within this definition are considered rank-and file employees.

Q: Who are required to pay the 13th month pay? Q: Are there employers who are exempted from paying the 13th month?

A: All establishments regardless of the number of employees are required to pay their rank-and-file A: Yes. The following employers are exempted to pay 13th month under PD 851:
employees the 13th month pay.
(a) Government and any of its political subdivision, including government-owned and controlled
Q: Who are entitled to receive the 13th month pay? corporations, except those corporations operating essentially as private subsidiaries of the Government;
(b) Employers already paying their employees 13th month pay or more in a calendar year or its equivalent
at the time of this issuance;
A: All rank-and-file employees regardless of the nature of their employment, and irrespective of the
(c) Persons in the personal service of another in relation to such workers; and
methods by which they are paid, provided they worked for at least one month during a calendar year.
(d) Employers who are paid on purely commission, boundary, or task basis, and those who are paid a fixed
amount for performing a specific work, irrespective of the time consumed in the performance thereof,
Q: How is 13th month pay computed? except where the workers are paid on piece-rate basis in which case the employer shall grant the required
shall grant the required 13th month pay to such workers.
A: The 13th month pay is computed based on 1/12 of the total basic salary of an employee within a
calendar year, or basic monthly salary for the whole year divided by 12 months. The other day, Secretary Baldoz issued Labor Advisory No. 15 Series of 2014 exhorting all private sector
Q: What are the components of “basic salary”? employers to voluntarily comply with the law and pay their workers the 13th month pay, including all other
lawful employee compensation and benefits.
A: “Basic salary” shall include all remunerations or earnings paid by an employer to an employee for
services rendered, but does not include allowances and monetary benefits which are not considered, or
integrated, as part of the regular, or basic, salary, such as the cash equivalent of unused vacation and sick
leave credits, overtime, premium, night differential and holiday pay. Basic salary includes cost-of-living
allowances.

However, these salary-related benefits should be included as part of the basic salary in the computation of
the 13th month pay if, by individual or collective agreement or company practice or policy, the same are
treated as part of the basic salary of the employees.

Q: Are maternity leave benefits included in the computation of 13th month pay?

A: No. Maternity leave benefits are not included in the computation of 13th month pay.

Q: When shall 13th month pay be paid?